An Armful of Predictions for 2013

By

Gary Dvorchak

| Jan 2, 2013 | 9:00 AM EST

In this piece, I will recap my 2013 predictions that I summarized Monday on Real Money Pro, when I covered the Daily Diary for Doug "Orson Welles" Kass. My key investment positions in 2013 are extensions of the themes I have been espousing for the last few months, so they should not be overly surprising. I hope they fall under the category of "insightful" and, to some extent, "common sense."

1. The federal budget battle continues unabated. This month's machinations are a non-solution. The U.S. still faces a trillion-dollar deficit, and the negotiations will be rehashed several times in 2013. In fact, by Valentine's Day the past month's discussions will be repeated with even more vitriol. The bill passed by the Senate defers the sequestration for two months, meaning the real battle over spending is yet to come. Even worse, although this bill "balances" $41 in tax increases for every $1 in spending cuts, President Obama has already vowed that any spending cuts will need to be accompanied by even more tax increases. No matter which side you are on, the reality is that this will create a higher-than-usual volatility in equity markets -- an argument to get long the CBOE Volatility Index (VIX)....425 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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